Pound Sterling (GBP) Plunges as UK Government Prepares for a No-Deal Brexit
The Pound (GBP) got off to an appalling start this week, suffering broad losses in the wake of Michael Gove’s suggestions that the UK government is now ‘working on the assumption’ of a no-deal Brexit.
Whilst Boris Johnson attempted to play down the prospect of the UK leaving the EU without a deal, the new PM’s words failed to calm GBP investors as he repeated his claim that Brexit would take place in October no matter what.
In the absence of any notable UK economic data today, expect the bearish bias towards the Pound to remain as the rising prospect of a no-deal Brexit spooks investors.
GBP/EUR Exchange Rate Tumbles, ECB Remains in Focus
The Pound to Euro (GBP/EUR) exchange rate sank by over a cent yesterday, with the single currency taking advantage of Sterling’s weakness to propel EUR/GBP to its best levels in almost a year.
However wider trade saw the Euro remain mostly flat as it remains under scrutiny as the European Central Bank’s (ECB) prepares to introduce fresh stimulus into the Eurozone in September.
Coming up today we have the publication of Germany’s latest CPI figures, where an expected fall in inflation is likely to dent the appeal of the Euro.
GBP/USD Exchange Rate Nosedives, USD Investors Remain Bullish Ahead of Fed Meeting
The Pound to US Dollar (GBP/USD) exchange rate sank over 1% to strike a 28-month low on Monday as the ‘Greenback’ continued its bullish run ahead of the Federal Reserve’s rate decision later this week.
This surge in USD was mostly due to a carry-over from Friday’s stronger-than-expected GDP figures, which helped temper Fed rate cut expectations.
Looking ahead, the release of June’s PCE price index will likely drive momentum in the US Dollar today, with an expected uptick in the Fed’s preferred measure of inflation likely to further the case for the bank to hold off on making more than one rate cut this year.
GBP/CAD Exchange Rate Plummets despite Pullback in Oil Prices
The Pound to Canadian Dollar (GBP/CAD) exchange rate sank over a cent yesterday following the collapse in Sterling, but in the face of sliding crude prices the oil-sensitive ‘Loonie’ was unable to repeat these gains against its other peers.
GBP/AUD Exchange Rate Sinks despite Weak Australian Data
The Pound Australian Dollar (GBP/AUD) exchange rate plummeted to an eight-month low overnight on Monday, with the slump in Sterling more than offsetting the larger-than-expected fall in Australian building permits last month.
GBP/NZD Exchange Rate Slumps on US-China Trade Optimism
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also slumped further last night, extending the pairing’s losses by another cent, as the ‘Kiwi’ was buoyed by optimism regarding US-China trade.